FA to consider rules on administrations
Fed-up football authorities looking to tackle adminstration sidestep head-on after two clubs announce intentions to nutmeg creditors
The Football Association is planning to look again at football clubs becoming
insolvent shortly before the end of the season to minimise points penalties.
Two clubs went bust when it loooked like they were going down last week –
Leeds and Boston United – leading to suggestions they had cynically cheated
creditors in order to pick up a ten point penalty this season when it no longer
mattered, rather than next.
An FA spokesman told Accountancy Age this week: ‘[The issue] will very likely
be looked at again in the close season in light of the Leeds and Boston cases.’
The issue has already been the subject of anguished discussion, he added:
‘This issue has been discussed at some length by The FA’s Financial Advisory
Committee (which is comprised of representatives of The FA and various league
representatives) and the general feeling was that there was no obvious
alternative that would solve the problem.’
Boston completed their CVA just minutes before the end of their last match,
which they were losing 3:1.
Leeds looked set to go down and went into administration before their final
game.
In Boston’s case the CVA will see their non-football creditors receive a
fraction of their investment if approved.
In an earlier instance HM
Revenue & Customs, one of the biggest losers when a club signs a CVA,
unsuccessfully challenged Exeter City as a breach of law.
Further reading:
Leeds score deliberate own goal
Leeds United on brink of insolvency
Resources & Whitepapers
Accounting Software The power of customisation in accounting systems
How football got its finances wrong